Thursday, October 14, 2021

Indian government considers reviewing bilateral air services agreements, airlines cautiously optimistic

The government is considering reviewing bilateral air services agreements, or ASAs, that India has signed with various countries, a move that has been welcomed by global airline executives while raising a degree of concern.

Globally, airlines are allowed to fly only after countries exchange ASAs with each other.  These agreements can specify the number of seats per week in each direction or the number of flights per week in each direction and also the cities to which a designated airline can fly.

Depending on the demand and individual needs of each side, the carrying capacity to each city can be defined.

Airlines in India can request the Ministry of Civil Aviation (MoCA) to increase flights to a particular country. MoCA sends the request to the Ministry of External Affairs (MEA), which forwards it to the Indian mission in the country to which the airlines want to operate more flights.

If foreign airlines want to operate more flights to India, they approach the Indian mission in their country. The Indian mission sends the request to the MEA, which forwards it to the MoCA. The MoCA then reaches out to the Indian airlines to gauge their own interest in increasing flights to that country.

In the last couple of years, India has hardly exchanged any fresh ASAs. Yet, the Indian government is keen to revise some ASAs which it believes are heavily skewed in favour of airlines from some other countries. Some experts say that only 36 percent of international air traffic to India goes to Indian airlines and over 60 percent of the revenue generated on these routes goes to foreign airlines.

It is in this backdrop that the Indian government is now looking at reviewing the bilaterals, a decision that has generally been welcomed by the global airline industry.

Rohit Ramachandran, chief executive officer of Kuwaiti airline Jazeera Airways, says he supports the Indian government’s move. “It is long overdue. Kuwait is probably the last country in the Gulf Cooperation Council (GCC) which has not had its bilaterals since 2007,” he said, adding that the allocated seat capacity of 12,000 seats on each side has been “maxed out.”

Since 2007, the Indian community in Kuwait has more than doubled to close to one million now, Ramachandran said. “It makes perfect sense to increase the bilaterals in a logical manner by which I mean in line with the population growth of the Indian community in Kuwait. So whether it is Indian nurses or teachers or middle-income engineers it makes sense for them to fly direct to their home country rather than fly through other points in the Gulf,” he said.

14/10/21 Ashwini Phadnis/Moneycontrol

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